1. How long the business has been in business.
A business with a long track record is a very good sign. This shows that it is well known in the area, and people are used to patronizing the business or using its services. The longer it has been in operation, generally, the better the business.
2. How long the present owner has owned the business.
The longer the present owner has been in business, the more likely he or she has been successful.
3. Why the present owner is selling.
If the owner has been in business for six months, is 37 years old, and wants to retire, you should be suspicious. The more valid the reason for sale, the more realistic the seller will be in considering your offer. However, keep in mind that after five or six years or more, people do get restless, “burn-out” sets in, and people look for new challenges. Why the seller is selling is an important question.
4. Why books and records are important.
This is the health of a business. Financial records of the business are a clear indicator of what the business has done.
Keep in mind that tax records are not designed to show the business in the best light; no one likes to pay more taxes than they have too. Business owners are no different. Generally, tax returns are a worst-case scenario. Many times, business owners pay personal expenses through their business.
Opportunity awaits- strait to you inbox first week of the month!